Business Directories

Global tech spending to fall on lower costs

Las Vegas, January 6, 2014

Global spending on technology will slip 1 per cent this year to $1.06 trillion as the lower average selling price of smartphones and tablets offsets unit growth in markets like China, a forecast said.

The decline is off the peak of $1.07 trillion estimated this year, according to the US Consumer Electronics Association (CEA) estimates.

However, Middle East and Africa region will see a 6 per cent spending boost,
the strongest globally. Latin America will see a 2 per cent boost, while emerging Asia will see a 1 per cent growth.

The spending decline will be greatest in what the CEA called Developed Asia which will see spending drop 8 per cent on top of the 11 per cent it fell in 2012. Western Europe will see tech spending drop of 6 per cent on top of the 3-per-cent drop of 2013, while the US will see a 1 per cent drop.

The forecast was issued at the opening of the annual International CES gadget show in Las Vegas.

Spending on smartphones and tablets is still expected to account for some 43 cents of every dollar spent on technology this year, it said.

But the average price of smartphones, for example, will fall from $444 in 2010 to an estimated $297 this year, despite the number of smartphones sold rising to 1.21 billion up from 1.01 billion.

Smartphones and tablets remain such key drivers of technology spending that they are eating into other categories of devices like point-and-shoot cameras, video cameras, portable GPS devices and handheld gaming devices, it said.

However, within other categories of devices there are a few pockets of growth, including wearable devices.

Smartwatch sales are expected to be 1.5 million units globally this year, up from 1 million in 2013, said Shawn DuBravac, the association's chief economist.

"This is a very nascent market. We're still looking for that killer application for that particular device," he said.